Iran signs 4 billion dollar oil deal with Russian firm

Russia has agreed to boost production in two oil fields in western Iran in a deal that will be highly lucrative for the Islamic Republic.

Iranian rig

“Increasing the production from these two fields will bring some $4 billion dollars to Iran” over the coming years, Iranian Oil Minister Bijan Namadar Zanganeh said at a signing ceremony in Teheran on March 14.

Russia’s state-owned Zarubezhneft and Dana Energy, a private Iranian company, will jointly develop the Aban and Paydar fields in Ilam province near the Iraqi border. The project will increase production at the fields from 36,000 to 48,000 barrels of oil per day.

It was Iran’s first such deal with a Russian oil firm. Russia’s oil firms have been hit by sanctions from the West over Moscow’s aggression in Ukraine.

Zarubezhneft will provide 80 percent of the financing for the project, while Dana will cover the rest.

National Iranian Oil Company head Ali Kardor said it was the country’s first such deal with a Russian firm.

“On the political front, relations with Russia are at the highest level, but in the economic sphere, they have not yet reached” the same level, he said.

The Trump administration’s threat to withdraw from Iran’s 2015 nuclear agreement with world powers has caused Western oil firms to be wary of doing business with Iran.

France’s Total defied pressure from the U.S. last July when it signed a $4.8 billion oil deal with Iran.

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